Most certainly, China is buying back African love. Finally, African countries can breathe after President Xi Jinping announced on Wednesday that China will cancel interest-free loans to African nations that are expected to culminate by 2020 closure.
Under the Africa-China relations 2018 Forum, Xi Jinping says “China will forgive Africa interest-free loans which are due to mature by the end of 2020.”
On Wednesday the China-Africa Summit of Covid-19 met online. The summit attracted dozens of African heads of states, the World Health Organisation, chief Tedros Adhanom Ghebreyesus, and the United Nations Secretary-General, Antonio Guterres. The chairperson of the summit, President Xi Jinping, said the debt delay would also be extended to the African nations most affected by the pandemic.
Furthermore, the Chinese President also called upon Chinese financial firms like the Export-Import Bank of China and the China Development Bank to conduct “friendly discussions” with African countries to “develop agreements for constitutionally guaranteed business loans.”
China will Cancel African Interest-free loans For Relevant Countries only
“China will work with the UN, WHO, and other partners to assist Africa’s response to Covid-19, and do it in a way that respects the will of Africa,” President Xi said.
In April, the G20 decided to postpone debt payments for developing nations worldwide until the end of 2020. Beijing also consented, as per the core of the G20 program, to postpone debt payments for 77 low-income states. This includes some relevant nations in Africa as well.
The analysts note while Beijing has in the past reimbursed the most interest-free loans to the countries in Africa. Tax concessions and business loans cover the remaining loans. But this only compensates for less than 5% of the total African massive debt to China. In 2018, China canceled Cameroon’s 78 million dollars; Botswana, 7.2 million dollars; and Lesotho, 10.6 million dollars. In the previous year, China canceled Sudan’s debt of 160 million dollars. In the same year, China restructured Congo-Brazzaville’s debts. This helped the country to clear extra loans from the International Monetary Fund, worth 449 million dollars.
According to the London-based Jubilee Debt Campaign, China maintains approximately one-fifth of the total loans in Africa. This campaign calls for the cancellation of lending to the world’s poorest nations.